This document discusses approaches to continuous process improvement in services. It covers foundations like focusing on customer needs, using data-driven decision making, and respecting employees. The Plan-Do-Check-Act cycle and basic quality tools are described. Challenges in services like variation are addressed. Six Sigma and Lean principles and tools for services are outlined, including defining processes, measuring performance, analyzing sources of variation, improving processes, and controlling quality.

1. Service Process Improvement

2. Foundations of Continuous
ImprovementCustomer satisfaction
◦Focus on customer needs
Management by facts
◦Formal data gathering and statistical analysis
Respect for people
◦Assumptions about employees
◦Customers as co-producers
◦Support and engagement

3. Plan-Do-Check-Act (PDCA)
CyclePlan
◦ Documenting the current process, selecting the problem,
determining possible root causes, and developing an action
plan
Do
◦ Implementing the process change on a trial basis and collect
data on performance measures
Check
◦ Review and evaluate the effect of the change
Act
◦ If the experiment is successful, standardize the process change,
provide training on the new process, and codify learning from
the improvement process

4. Basic Tools for Quality and
Productivity Improvement
Check sheet
Run chart
Histogram
Pareto chart
Flowchart
Cause-and-effect diagram
Scatter diagram
Control chart

5. Process Improvement
Challenges in ServicesHigh input and process variation
◦ Variation reduction is a more complicated and sensitive issue than
in manufacturing
Poor tracking of flow, especially of customers in the process
◦ Customers cannot be treated like inventory
A tradition of individuality and employee discretion
Lack of meaningful data and data-based decision-making
◦ Quality metrics are often subjective (although time is an example
of an objective metric in transactional services)
Employees and customers cannot be controlled like machines

6. Six Sigma for Services
PrinciplesSix Sigma:
◦ Emphasizes the need to recognize high-impact, financially quantifiable
opportunities and eliminate defects as defined by customers
◦ Recognizes that variation hinders the ability to reliably deliver high-quality
services
◦ Requires data-driven decisions using a comprehensive set of quality tools
◦ Provides a highly prescriptive cultural infrastructure for aiding
implementation
◦ When implemented correctly, promises and delivers $500,000 of improved
operating profit per Black Belt per year
The Define-Measure-Analyze-Improve-Control (DMAIC) improvement
process used in Six Sigma is analogous to the PDCA cycle

7. Six Sigma Organization Roles
and Responsibilities
Champion Green Belts
Project MemberExecutive
All employees
Black BeltsMaster Black
Belts
•Full-time
•Train and coach Black and Green Belts
•Statistical problem solving experts
•Devote 50%-100% of time to Black Belt activities
•Facilitate and practice problem solving
•Train and coach Green Belts and project teams
•Project owner
•Implement solutions
•Black Belt managers
•Understand vision
•Apply concepts
•Part-time
•Help Black Belts
•Own vision, direction,
integration, results
•Lead change
•Part-time
•Project-specific

8. Sources of Variation in
ServicesCustomer introduced variability
◦ Arrival variability
◦ Request variability
◦ Capability variability
◦ Effort variability
◦ Subjective preference variability
Internal process variability
◦ Process design
◦ Employees
◦ Equipment

9. Reduction of Variation in
ServicesDue to the involvement of the customer in the service process and the
more intangible nature of service products, services tend to have more
uncertainty (i.e., variation) than manufacturers.
Process standardization in services often involves defining a framework for
action and customer interaction rather than a rigid sequence of steps. Any
standard that causes “failure demand” (e.g. strictly limiting the length of
customer service calls) is an inappropriate application of variation
reduction.
Standard operating procedures provide a basis for evaluating service
processes and assessing the impact of process changes.
Many service processes can be more standardized than they currently are,
making services more efficient and effective (e.g. best-practice bundles in
healthcare, separate processes for high and low complexity services such
as insurance applications and grocery store checkout, Mandarin Oriental’s
LQEs).

10. Lean Services PrinciplesThe lean approach to process improvement includes:
◦ A focus on customers (both internal and external)
◦ Maximizing process velocity (i.e., flow)
◦ Tools focused on analyzing process flow and delay times at
each activity in a process
◦ Eliminating waste
◦ Separating “value-add” from “non-value-add” and addressing
the root causes of non-value-add activities
◦ Reducing unnecessary complexity and its costs

11. Throughput Time and Process
Speed
Throughput time is the amount of time an item (e.g. customer)
takes to complete the process
Work-in-process is the number of items in progress
Average completion time is the number of items completed per
unit time
If two of the three quantities are known, the other two can be
calculated
Increasing process speed requires either reducing the WIP or
increasing the completion rate
Little’s Law:
ratecompletionAverage
progress-in-workofAmount
timeThroughput 

12. Services Wastes
Overprocessing
◦ Trying to add more value to a service than what your customers want or will pay
for
Transportation
◦ Unnecessary movement of materials, products or information
Motion
◦ Needless movement of people
Inventory
◦ Any WIP in excess of what is required to produce for the customer
Waiting time
◦ Any delay between when one process step/activity ends and the next
step/activity begins
Defects
◦ Any aspect of the service that does not conform to customer needs
Overproduction
◦ Production of outputs beyond what is need for immediate use

13. Lean Six Sigma for ServicesLean Six Sigma combines the emphasis on maximizing flows and reducing
waste from Lean with variation reduction and an organizational infrastructure
and specific improvement process from Six Sigma.
Lean Six Sigma for services focuses on improving the customer experience and
service outcomes by addressing poor flow and excess waste and variation in
the service delivery process for both the firm and customer co-producers.

14. Lean Six Sigma DMAIC Tools
(Lean tools in bold)
Define Improve ControlAnalyzeMeasure
•Project selection
tools
•PIP management
process
•Value stream map
•Financial analysis
•Project charter
•Multi-generational
plan
•Stakeholder
analysis
•Communication
plan
•SIPOC map
•High-level process
map
•Non-value-added
analysis
•VOC and Kano
analysis
•QFD
•RACI and quad
charts
•Operational
definitions
•Data collection plan
•Pareto chart
•Histogram
•Box plot
•Statistical sampling
•Measurement
system analysis
•Control charts
•Process cycle
efficiency
•Process sizing
•Process capability
•Pareto charts
•C&E matrix
•Fishbone diagrams
•Brainstorming
•Details “As-Is”
process maps
•Basic statistical tools
•Constraint
identification
•Time trap analysis
•Non-value-added
analysis
•Hypothesis testing
•Confidence intervals
•FMEA
•Simple & multiple
regression
•ANOVA
•Queuing theory
•Analytical batch
sizing
•Brainstorming
•Benchmarking
•TPM
•5S
•Line balancing
•Process flow
improvement
•Replenishment pull
•Sales & operations
planning
•Setup reduction
•Generic pull
•Kaizen
•Poka-yoke
•FMEA
•Hypothesis testing
•Solution selection
matrix
•“To-Be” process maps
•Piloting and simulation
•Control charts
•Standard operating
procedures (SOPs)
•Training plan
•Communication plan
•Implementation plan
•Visual process
control
•Mistake-proofing
•Process control
plans
•Project
commissioning
•Project replication
•Plan-Do-Check-Act
cycle

15. Examples of Lean Six Sigma
ToolsPoka-yoke (mistake-proofing)
◦ A poka-yoke device is a simple, often inexpensive, device that prevents
employee and customer mistakes from becoming defects (e.g. e-commerce
order forms, hospital wrist bands, spellcheckers).
◦ A poka-yoke device undertakes 100% automatic inspection and prevents
defects and/or stops or gives a warning when a defect is discovered.
◦ Poka-yoke steps include: elimination (possibilities for accidents or errors are
eliminated), replacement (replacing human actions by automated actions
for safety and error reasons), facilitation (make the work easier to carry out
and less error prone), detection (identifying mistakes before they become
defects), and mitigation (reduce the effects of an error).
Design of experiments (DOE)
◦ DOE is a method for simultaneously investigating anywhere from a handful
to dozens of potential causes of variation in a process. Experiments are
conducted by varying a number of factors according to a statistically-based
plan.